New Investment Promotion Law encourages growth

Passed by Parliament on Wednesday January 11, 2023, the Investment Promotion (Amendment) Bill 2022, encourages the growth of Papua New Guinea-owned small-to-medium enterprises.

The Investment Promotion (Amendment) Bill 2022 is a change from the Foreign Investment Regulatory Authority (FIRA) Bill, tabled by the previous Government, in response to concerns that SMEs were facing unfair competition by foreign businesses.

The FIRA Bill went too far in restricting business activities and was damaging PNG’s reputation as an attractive destination for foreign investors.

After in-depth consultation with the public and the business community, the Government accepted a balanced policy proposal put forth by the Investment Promotion Authority (IPA), which addresses SME concerns while providing investors with confidence.

Key changes are:

  • Changing the foreign certification system to process applications quicker, and automatically rejecting applications for reserved activities to support SMEs;
  • Reviewing the Reserved Activities List at least every three years;
  • Introducing more reporting obligations on foreign investors, and providing powers to cancel certification where key business laws are breached;
  • Improving IPA’s enforcement and compliance, and making better allowances for cross-agency enforcement;
  • Creating a dedicated Registrar of Foreign Investment to oversee the system with powers to speed up unwanted incoming investment, automatically deny unwanted investment, and enforce compliance.

Prime Minister James Marape said, “In the 2021 Budget, 2022 Budget and now the 2023 Budget, we have placed more support and funding to ensure SMEs start moving.

“This bill is a first step towards clearly segregating and ring-fencing businesses that PNG citizens can participate in.”

Author: 
Press Release